U.S. oil producers added 21 oil rigs in the past week, the most in over a year, data showed on Friday, suggesting that drillers were moving more aggressively than expected, just before crude prices’ latest dive down.

Oil producers, who cut rigs in the face of falling prices late last year, began to add rigs back in the week ending July 2, oil services company Baker Hughes Inc said in its closely followed report.

The latest addition comes amid a 21 percent collapse in U.S. crude prices from a recent high in June, data showed on Friday.

The rise in the rig count this week was the biggest increase since April 2014. It was, however, only the third addition over the past 33 weeks, bringing the total rig count up to 659, the highest since late May.

Drillers added oil rigs in all four of the major U.S. shale oil basins with three in the Permian in West Texas and eastern New Mexico, two in the Eagle Ford in South Texas, and one each in the Niobrara in Colorado and Wyoming and the Bakken in North Dakota and Montana.

The rig increase shows that energy firms have followed up on their plans to drill more when U.S. crude prices were averaging $60 a barrel in May and June.

U.S. crude oil futures this week, however, entered a bear market with prices down to about $48 a barrel from a recent high over $61 in late June. A 20 percent downturn is considered by many traders to constitute a bear market.

In reaction to the Baker Hughes report, U.S. crude futures extended their losses, from down 0.8 percent to down 1.5 percent on the day, to a contract low of $47.72.

Analysts said both U.S. and Brent crude futures were trading at their lowest levels since March on lackluster global demand growth and lingering oversupply concerns as the Organization of the Petroleum Exporting Countries (OPEC), the United States and other producers continue pumping record or near record amounts of oil out of the ground.

The current bear market was the biggest decline for U.S. crude futures since the front-month fell nearly 60 percent from over $107 in June 2014 to under $44 in January due to those same oversupply and uninspiring demand growth worries.

In response to that near 60 percent price collapse, U.S. drillers eliminated thousands of jobs and idled 60 percent of the record high 1,609 oil rigs that were active in October.

Despite those cuts, U.S. crude production has averaged 9.6 million barrels per day for nine weeks in a row, its highest level since the early 1970s, according to government data.

(Reporting by Scott DiSavino; Editing by Marguerita Choy)

Copyright (2015) Thomson Reuters.

This article was from Reuters and was legally licensed through the NewsCred publisher network.

In the US it is the drlg sector that has been hit– production is at a record high and storage is full so even if OPCEC price does come up oil companies will work off storage getting a higher price for that cheaper oil before going back drlg –

So you really like the story about tte ‘Tooth Fairey’?
Patrick jumping up and down ‘high fiving” is not the thing to be doing. No pretty pictures, no syrupy stories…. if someone has a chance to get out pretty stories could cause them to make the wrong decision
In the ’86 crash I hung on until ’88 then lost everything home vehicles, boat, shop –and marriage. And had to get another job–it was not easy and when the oil field came back- I came back.

There’s shouldn’t have been 1600 rigs drilling in the first place. 1600 rigs is what caused this collapse. Simple economics. They need to put a cap on rigs to avoid this in the future! But no, too many money hungry new oil companies out there looking to get rich quick on oil. I’d rather makes Billions over 30 years of steady oil prices, than to make Millions on 4 years of 100+ a barrel oil. Simple

Josh what you are saying does not make any sense.. Drlg for oil is to supply the nation’s needs and end imports. Taking your concept to the point of foolish would be stacking all rigs except for a few and let the price soar.. Profitable for the leaseholder and profitable for the oil companies BUT the high cost of oil would cause a recession.

I didn’t say stack all the rigs except a few. But 1600 rigs was way too much by a loonnngggg shot! 1000+ is still a long shot. Maintain a steady move of rigs to keep the supply glut under control and maintain 75-80 dollar oil. That’s not expensive and turns a good profit while keeping millions of people employed.

Josh the US oil boom reduced imports– the oil NOT imported stayed in the global supply OPEC decide to maintain their production rate causing the glut.
The US can not control the glut- NOTE over 1,200 rig stacked in the US, OPEC maintains production rates and the glut continues

Really-? The glut is not just in the US–it is in the global supply. So explain how adding US crude to the global supply would not increase the glut… OPEC is not going to reduce production to make room for US exports on the world market.

“Increase in refinery efficiency made possible by lifting the ban and a nuanced consideration of OPEC behavior. Even if we found more equivocal results, we believe that the economic arguments for lifting the ban are strong, based primarily on the gains from free trade and the example set when we live by our market principles.”

How can the US export and meet any of these projections while still have to import.
The $27.50/ bbl is pure speculation– it has not been done and indication it can’t be done
And none of the above addresses the global glut which is causing the domestic glut

Nobody knows nothing about nothing just talk about this up and down stuff! It’s all up to the system on what’s going to happen and when…so stop wasting peoples time and hopes when in fact nobody knows when its going to happen…live life day by day be glad we’re still Alive… And if you don’t like it where your at and what your doing well only YOU can help that. Just my opinion God bless all and taking it one day at a time.

Surprised? Not me. Why? The people that work the petroleum sector of this country’s economy, and the importance of oil to a stable oil supply, to world economy, aren’t stupid. They see what’s coming down the pike a lot future ahead than you think! Given this agreement with Iran, if I may, they see war coming and a total disruption of oil from the Middle East, which would bring total chaos to the world if there wasn’t one stable oil supplying country.

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